In today’s Exponential Investor:

  • Whoosaaaa
  • BlackRock, BNY Mellon, Fidelity, Bank of America are in
  • Choosing your own luck

I’m a dad of two young sons.

One is three and a half, the other one and a half.

If you’ve got kids this age, you’ll know that life is a constant negotiation.

Putting clothes on, going to the toilet, getting in or out of the car, leaving the dog alone and, of course, eating breakfast/lunch/dinner (pudding never seems to be an issue). It’s all just one long string of negotiation tactics.

And yes, bribery gets thrown into the mix from time to time, too.

Of course, you can never get too mad about it. After all, they’re just little kids trying to figure out their world, themselves and you.

You can get frustrated about it, though. And many a deep breath, exhalation and “woosaa” are needed.

The most frustrating thing of all, however, is simply that the kids often just don’t listen to what you’re trying to tell them.

To be fair, why should they? They just want to have fun, play a bit and do their thing. They don’t know you’re trying to help shape them to be better humans, to absorb your experience and knowledge and foresight.

They just see you as the guy trying to get them to do something they don’t want to do, even if it’s for their own good.

But if there’s one other thing we learn from having kids, it’s that eventually they’ll realise we were right all along.

Building in winter

This sense of parental frustration can seep its way into the markets and into investor psychology.

I say this because I recently broadcast an hour-long briefing where I sat down with Southbank Investment Research’s former publisher, Nick O’Connor, to talk about the current “crypto winter”.

We discussed what was really happening in the crypto markets, and whether investors are at all interested in diving deeper than the mainstream’s coverage of price.

I explained that the world’s largest institutions are all laying the foundations and groundwork for the next big crypto cycle. They’re mobilising entire teams to build, research, and create products and services for their customers when that demand ratchets up and peaks again.

And I’m not talking little sideshow neo-banks or start-up FinTechs, but the giants of industry – from BlackRock and BNY Mellon to Fidelity, Bank of America and HSBC.

  • BlackRock is working with Coinbase to open up crypto markets to their institutional and sophisticated investors.
  • BNY Mellon is now operating a digital assets custody solution.
  • Fidelity has also offered “institutional Ethereum capabilities” to its clients, and is also in a digital-assets hiring spree, with around 77 digital-asset-related jobs currently live.
  • Bank of America is training up over 50,000 of its people in virtual reality – so they can service clients better in a virtual, digital world.
  • And HSBC bought land in crypto platform The Sandbox – being the first global financial institution to own digital crypto land in this metaverse. It plans to engage with customers via Web3 and the metaverse.

That’s a lot of activity for a so-called “crypto winter”.

And our broadcast homed in on how similar today’s situation is to 2019, the last crypto winter.

In 2019, the market prices were similar in pattern. We’d just come off eye-watering highs in 2017 and early 2018. The market headed south in 2018, bottoming in 2019 and early 2020.

Then, seemingly out of nowhere, it kicked into overdrive, surpassing all previous highs from 2017 and 2018 and blowing every other asset class in the world clean out of the water (again).

That ramp-up didn’t just happen out of nowhere, though.

The springboard for it was built in 2019 during the winter. When the prices were cratering the quality projects and platforms and protocols were busy at work, building out their tech and offerings, just like The Sandbox and just like Coinbase and just like custody offerings – and this allowed the wild run in 2021 to take hold.

Choose your own adventure

Today, the same things are happening. We see it as noted above. A platform – a springboard, if you will – building for the next mega-cycle.

But our briefing, our information, the facts about what is really happening in the crypto markets, fell on deaf ears.

We had a tepid (at best) response to our broadcast.

The truth is that investors just didn’t want to listen to what we had to say.

People are living through one of the most brutal economic crises that many have perhaps ever faced. The financial stresses and strains have been unmatched for decades. For some, it has never been so bad, with so gloomy an outlook.

So we understand why it’s hard to listen to us trying to get the message across that it’s at times like these that the real opportunity bubbles to the surface.

But we must reinforce to as many investors as we can that these are opportunities you must take to be successful in the markets.

The hardest thing to do in the market is to move contrary to the constant barrage of information you get from the mainstream media. Their death loop news feeds don’t help the optimistic, opportunity part of your brain fire up.

That’s what we are trying to do. I’ve said before that luck is simply the intersection of preparation and opportunity.

Well the preparation has been our education on the crypto markets over the last several years. Hopefully, by now, you’re clued up enough to understand that crypto is here to stay and will become and impactful part of our future.

And opportunity has now arrived. So, if you’re prepared, the “luck” part of the equation is easily taken care of.

The only thing you have to do is to choose your own adventure. You can decide to act and be one of the fortunate ones in the next cycle, or not.

Your call.

Until next time…

Sam Volkering
Editor, Exponential Investor